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New law could have South Africa out of international syncFollowing a spate of highly negative media reports these past few years about its poor service delivery following a transformation process, South Africa’s Companies and Intellectual Property Registration Office (CIPRO) has been put under the spotlight again by the passing of the new Companies Act, which redefines the framework of services that CIPRO should be rendering; while another legislative process is in conflict with an agreement that South Africa signed as member of the World Intellectual Property Organization (WIPO).
CIPRO is mandated to ensure and regulate the registration and protection of business entities and intellectual property rights. Or, as it proclaims itself, it is “the gateway to formal economic participation”.
In any country, this task goes to the core of ensuring a stable economic and business environment that evokes trust and confidence, allows the wheels of commerce, industry and technological advancement to turn smoothly and offers security to investors. Yet in South Africa, the chaotic situation at CIPRO suggests that quite the opposite prevails, posing a real threat for the country and its economy.
A new feature in the Companies Act 2008 (Act 71 of 2008), which became law last year and for which the regulations were published in December in the "Government Gazette" for comment, is the requirement that CIPRO and the Office of Companies and Intellectual Property Enforcement (OCIPE) must merge to become a commission within a period of 18 months of the promulgation of the new Companies Act.
Web-based services
In the interim, CIPRO has attempted to make the switch from a paper-based government service provider to a Web-based electronic service provider – but with alarming results.
CIPRO itself says of its website: “This website is a new delivery channel that will be used to avail, to all our customers and stakeholders, new automated and electronic services as per our strategic imperatives."
However, far from providing the easy and instant access to services, a quick scan of the website exposes a chaotic, incomplete and user-resistant service riddled with problems.
On the CIPRO homepage, there is a long list of problems hampering both the Web-based service and CIPRO’s general (non-Internet) services. These range from “network and infrastructure problems”, to backlogs, delayed turnaround times, slow website responses, unavailability of services, delays in service rollouts, technical problems, changed services, and more.
Some of these problems date back a few years. But in its annual report, however, CIPRO seeks to place the blame for many of its woes on the global recession of 2009!
The CIPRO website is heavy on visions, missions, slogans and core values, and rather light on substance. The switch to the new electronic online system has resulted in considerable backlogs that may be exacerbated further by the current overhaul of its information technology system which, CIPRO says, will only be completed by March 2011.
Meanwhile, many professionals such as lawyers who deal with CIPRO on a daily basis have become highly frustrated with the lack of service.
Fraud and corruption
CIPRO is plagued also by widespread fraud and corruption. After having awarded a tender for the implementation of the ECM, stories of tender rigging emerged. CIPRO issued a statement that the tender had been audited by the Auditor-General and that no problems had been found. However, the Auditor-General then instructed CIPRO to retract that statement, as it was untrue.
Furthermore, five CIPRO staff members were implicated recently in the duplication of company names (allegedly for the purpose of committing tax fraud). They were suspended, but have not been charged.
And the chief information officer (CIO) of CIPRO, Michael Twum-Darko, who was implicated in allegations of tender rigging, still has not received a security clearance as is required for his post. It is being alleged as well that Twum-Darko was appointed apparently on a salary much higher than that which was advertised with the post, and he has since received exceptional increases.
And while the government paid lip service to stronger action and from time to time announced measures to facilitate whistle-blowing, those who did dare to blow the whistle on their corrupt colleagues often found themselves being 'punished' for their efforts, as has been the case with CIPRO’s risk manager, Rocco De Lorenzo.
De Lorenzo allegedly has been suspended on a charge of "breach of confidentiality" after he supplied information to the police regarding the tender-rigging charges made against Twum-Darko.
Cipro's chief executive officer Keith Sendwe has denied that whistle-blowing had anything to do with the suspension, but will not make known the 'real' reasons for De Lorenzo’s suspension.
New law to change IP in South Africa
Meanwhile, the investigative magazine "Noseweek" has revealed in its latest issue how MacDonald Netshitenze – brother of Joel, the former head of the Policy Unit in the Presidency and member of the ANC national executive committee – who was appointed Registrar of Patents and Trademarks in the mid-1990s without any background in intellectual property (IP), is pushing for a new bill to be passed that “will lead to all sorts of absurdities, as it seeks to give protection to things which are not original, making traditional knowledge the antithesis of intellectual property”.
The magazine further alleges that after Netshitenzhe was appointed, “applications for registration simply weren’t examined; files went missing, contested matters were heard, but no judgements were forthcoming, and search facilities were blocked”.
After a judge criticised this state of affairs and IP lawyers attempted to remove him through a court application, he apparently was moved sideways and made director of Commercial Law and Policy at the Department of Trade and Industry (dti) under which CIPRO falls.
Now Nteshitenzhe is driving passage of his 'master stroke', the Intellectual Property Laws Amendment Bill, the main aim of which is to introduce protection for traditional knowledge such as Bushman and Ndebele art or folklore.
The bill, if passed, will allow communities to claim ownership of these aspects with a financial benefit for them.
While the article says there seems to be fairly general agreement that some kind of protection should be given to traditional knowledge, WIPO wants IP law to be left alone, suggesting a separate law for which it has drafted a model to which South Africa has subscribed. But even so, Netshitenzhe wants to proceed with his own law.
Some experts now point out that Netshitenzhe’s bill will lead to many absurdities and uncertainties in the IP field, such as claiming protection for things that are not original. The constitutionality of the bill is being questioned as well.
